F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2019-2020) – fifa.com – atto non ufficiale – Decision 8 May 2020

Decision of the

Dispute Resolution Chamber

passed on 8 May 2020,

in the following composition:

Clifford E. Hendel (USA / France), Deputy Chairman

Alexandra Gomez Bruinewoud (Uruguay / The Netherlands), member

Stefano La Porta (Italy), member

on the claim presented by the player,

Djordje Rakić, Serbia

represented by Mr Mirko Poledica

as Claimant

against the club,

Zhejiang Greentown FC, China PR

represented by Mr Yu Shengjie

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On an unspecified date, the Serbian player, Djordje Rakić (hereinafter: the player or the Claimant) and the Chinese club, Zhejiang Greentown FC (hereinafter: the club or the Respondent) concluded an employment contract valid as from 1 February 2018 until 31 December 2018 (hereinafter: the contract).

2. According to art. 5 of the contract, the player was entitled to receive a total fixed remuneration of EUR 800,000, payable in 10 monthly instalments of EUR 80,000 each, due on the last day of each month from February to November 2018.

3. According to art. 6 (2bis) of the contract, the club undertook to cover for injury or illness expenses of the player should they be employment-related.

4. According to art. 10.2 (2) of the contract, the club could terminate the contract and no longer pay its residual amount if, inter alia, the player concealed an injury.

5. According to art. 10.2 (4), the club could terminate the contract and no longer pay its residual amount if, inter alia, the player “seriously violates professional ethics or sports and cause serious damage to [the club’s] interest and reputation”.

6. According to art. 12. (2) and 12 (3) of the contract, the parties respectively agreed on the following:

“In case of no settlement can be reached through consultation, the dispute shall be submitted to the Proceeding Commission of [the Chinese Football Association]. In case [the player] is a Chinese citizen, the award of the Commission is final and binding”.

“In case [the player] is a foreign citizen, the proceeding can be submitted to FIFA and the award of FIFA is final and binding”.

7. On 15 June 2018, the club’s physician stated as follows (quoted verbatim): “the body of [the player’s] internal meniscus of the right knee is broken, and the only therapeutic option it’s surgery (sic), in [his] opinion”.

8. On 20 June 2018, the player sent a correspondence to the club in which he requested to be provided with adequate and immediate medical treatment.

9. On 3 July 2018, the player sent a correspondence to the club in which he stated that the club did not take any action regarding the injury suffered by the player, and requested an authorization to undergo surgery in Europe at his own costs.

10. On 6 July 2018, the club sent a “notice of contract termination” to the player in which it indicated, inter alia, that the player had “concealed injury to our club and that [the player] violated professional ethics” and that, as such, it terminated the contract for misconduct based on its art. 10.2 (2) and (4).

11. On 10 July 2018, the player sent a correspondence to the club and gave it 3 days to “withdraw” the contract termination otherwise he would lodge a claim in front of FIFA.

12. On 25 July 2018, the club refused to perform such “withdrawal” as requested by the player.

13. Upon FIFA’s request, the player indicated that he remained unemployed during the period between 6 July 2018 and 31 December 2018.

14. The player lodged a claim against the club for breach of contract without just cause and requested the payment of the following amounts, plus 5% interest p.a. as from 6 July 2018:

a. EUR 480,000 corresponding to the residual value of the contract as of the date of termination by the club (i.e. salaries from July to December);

b. EUR 4,596 as the surgery costs; and

c. EUR 804 as the therapy costs.

15. The player further requested the imposition of sporting sanctions against the club.

16. The player considered that the club did not have just cause to terminate the contract and that the club failed to provide medical assistance and adequate treatment after sustaining a knee injury on 10 March 2018, despite the club’s physician recommending surgery.

17. The player further argued that the poor treatment of his injury led him to sustain a more serious injury to his meniscus, and that in this respect the club agreed to the player being examined in Germany where such injury was diagnosed.

18. The player emphasised that it informed the club of the diagnosis directly but that upon his return to China the club “had no interest in his health” which is why he sent two letters on 20 June and on 3 July 2018, which were duly received by the club.

19. The club, for its part, contested the competence of FIFA based on art. 12.2 of the contract, which stipulates that “in case of no settlement can be reached through consultation, the dispute shall be submitted to the Proceeding Commission of [the Chinese Football Association]. In case [the player] is a Chinese citizen, the award of the Commission is final and binding”.

20. In view of the above, the club is of the opinion that the Proceeding Commission of the Chinese Football Association must be the competent first instance to decide on this dispute.

21. As to the substance, the club confirmed that on 10 March 2018 the player injured his right knee but indicated that this injury had no link to the player’s right meniscus injury.

22. In fact, the club explained that the player played 6 official matches between 10 March and 19 May 2018 and argued that it is impossible to play with a broken meniscus.

23. The club stated that during the three-week break it gave its players due to the tenure of the FIFA World Cup 2018, the player went to Germany for a knee exam on 25 May 2018, where he was diagnosed with a broken meniscus.

24. The club further declared that at the time, the player stated that he would ”need to clean [his] knee. It’s an arthroscopy. (…) Recovery will be like 3 weeks max”.

25. In this regard, the club outlined that its physician had been apparently informed of this injury by the physician who checked the player in Germany and summoned the player back “to explain why he lied”.

26. The club argued that by “hiding” the seriousness of his injury, the player hindered the club from signing foreign replacements in a timely manner, and that by his actions the player caused some damages to the club.

27. Finally, in view of the player’s alleged refusal to give any explanations, the club terminated his contract. In this respect, the club alleged that it did not receive the player’s communications dated 20 June and 3 July 2018.

28. Consequently, the club requested that it should be considered that the contract was terminated with just cause and that no costs for medical expenses shall be paid to the player.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 2 April 2019. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition March 2020) the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a club and a player that have an international dimension.

3. As a consequence, the Dispute Resolution Chamber would, in principle, be competent to decide on the present litigation which involves a Serbian player and a Chinese club regarding an employment-related dispute.

4. However, the Chamber acknowledged that the club contested the competence of FIFA’s deciding bodies on the basis of art. 12.2 of the contract, alleging that the competent body to deal with any dispute deriving from the relevant employment contract is the Proceeding Commission of the Chinese Football Association (hereinafter: the Chinese NDRC).

5. Contrariwise, the Chamber noted that the player insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against the club, and that he deemed that the club did not provide any conclusive supporting documentation evidencing that the Chinese NDRC meets the requirements set out in art. 22 b) of the FIFA Regulations on the Status and Transfer of Players.

6. Consequently, the Chamber deemed that it should first of all examine its competence in relation to the contract at the basis of the employment relationship between the parties of the present dispute.

7. Taking into account the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the March 2020 edition of the Regulations on the Status and Transfer of Players it is competent to deal with a matter such as the one in hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. In this regard, the members of the Chamber further referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

8. Furthermore, the members of the Chamber directly recalled the first sentence of art. 22 of the Regulations on the Status and Transfer of Players, which stipulates that FIFA’s competence is without prejudice to the right of any player or club to seek redress before a civil court for employment related disputes.

9. In this context, and while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber deemed it of utmost importance to highlight that the present dispute pertains to an employment contact.

10. Having said this, the members of the Chamber turned to the contents of the contract, which is the basis of the present dispute between the player and the club. In this respect, the Chamber noted that the relevant contractual clause unequivocally stipulates that in case the player was a foreigner (i.e. not Chinese), then the matter can be submitted to FIFA.

11. What is more, the DRC observed that the Respondent did not provide any evidence that the Chinese NDRC meets the aforementioned criteria, and in particular the principle of equal representation.

12. Therefore, the members of the Chamber deemed that there is no existence of an exclusive jurisdiction clause in the contract which would preclude the Chamber from adjudicating on the present dispute. To the contrary, the members of the Chamber stressed that the applicable jurisdiction clause deems FIFA as competent to hear the dispute.

13. In view of all the above, the Chamber established that the Respondent’s objection towards the competence of FIFA to deal with the present matter has to be rejected, and that the Dispute Resolution Chamber is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

14. Subsequently, the DRC analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, he confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition March 2020) and considering that the present claim was lodged in front of FIFA on 2 April 2019, the June 2018 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

15. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and documentation on file. However, the DRC emphasised that in the following considerations, it will refer only to the facts, arguments, and documentary evidence which it considered pertinent for the assessment of the matter at hand.

16. By doing so, the Chamber firstly recalled that the parties had signed the contract, according to which the player was entitled to receive a total fixed remuneration of EUR 800,000, payable in 10 monthly instalments of EUR 80,000 each, due on the last day of each month from February to November 2018.

17. In addition, the Chamber observed that according to art. 6 (2bis) of the contract, the club undertook to cover for injury or illness expenses of the player should they be caused by work; otherwise, such expenses would be borne by the player.

18. In this regard, the Chamber outlined that under art. 6 of the contract there seemed to be two sub-clauses number as “2”, hence why it decided to refer to the second one as “2bis” in the present decision.

19. The DRC further observed that it remains undisputed that the player sustained an injury, but that the parties dispute whether the player’s injury was concealed by the latter.

20. In this regard, the DRC took note, on one hand, of the fact that the club is of the opinion that the player did not tear his meniscus in March 2018 as he carried on playing, but that he concealed the meniscus injury whilst on holiday, which caused harm to the club, as it could not find a replacement in time. The club deems this to be ground for the termination of the contract.

21. On the other hand, the DRC observed that the player is arguing that the club did not offer proper medical treatment after the first knee injury, which led to the meniscus injury, and that the club agreed to his injury assessment in Germany and was informed about it in due time.

22. In continuation, the members of the Chamber took into account that, on 6 July 2019, the club notified the player of the termination of the contract on the basis that the player had “concealed injury to our club and that [the player] violated professional ethics” and that, as such, the club had terminated the contract for misconduct based on its art. 10.2 (2) and (4), hence with just cause.

23. The player, for its part, submits that the club terminated the contract without just cause, and requested compensation for breach of contract.

24. The DRC highlighted that the central issue in the matter at stake would be, thus, to determine as to whether the club had just cause to terminate the contract on 6 July 2019.

25. In this regard, the Chamber recalled the contents of art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the burden of proof of that fact.

26. Accordingly, from the documentation on file, the members of the Chamber observed that the player sustained a first knee injury in March 2018, although he managed to play some additional games afterwards, and that he was later diagnosed in May 2018 with a torn meniscus by a physician in Germany.

27. In continuation, in the light of the main reason at the basis of the termination of the contract in the matter at hand, i.e. the player’s medical condition, the Chamber wished to emphasise that on the basis of art. 18 par. 4 of the Regulations and the Chamber’s respective jurisprudence, a club wishing to employ a player has to exercise due diligence and carry out all relevant medical examination prior to entering into an employment contract with a player.

28. The members of the Chamber noted from the file that the player had been medically checked prior to the signature of the contract by and between the parties, following which he had been medically cleared. The Chamber also took into account that the player had normally rendered his services to the club.

29. The Chamber further took into consideration that an injury or health condition of a player can be no valid reason to cease the payment of a player’s remuneration and even less so to terminate an employment contract. In this regard, the Chamber highlighted that it is the club’s responsibility to secure the continuation of payment of remuneration in such cases, possibly by means of adequate insurance. In the case at stake, the topic of the coverage for medical expenses related to work was even explicitly included in article 6 (2bis) of the contract.

30. As regards the club’s allegation that the player had concealed his injury, which was also invoked by the club as a reason for the termination of the contract, the Chamber stressed that there is no documentation on file in support of that position.

31. On account of all of the above, the members of the Chamber unanimously rejected the club’s arguments and decided that it terminated the contract on 6 July 2019 without just cause. Therefore, the DRC concluded that the club shall compensate the player for breach of contract.

32. Bearing in mind the foregoing, the Chamber then turned its attention to the issue of the player’s request of reimbursement of medical costs, and noted that it was both contractually substantiated and duly evidenced, as the player brought forward the relevant documentation.

33. Hence, on the basis of art. 6 (2bis) of the contract and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player EUR 5,400 as medical expenses incurred by the player.

34. Additionally, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the club must pay to the player interest of 5% p.a. on the said amount as from the dates the expenses were incurred until the date of effective payment.

35. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the player under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.

36. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

37. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body.

38. The members of the Chamber then turned their attention to the remuneration and other benefits due to the player under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract in the calculation of the amount of compensation.

39. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract as from its date of termination without just cause by the club, i.e. 6 July 2019, until 31 December 2019, and concluded that the player would have received in total EUR 400,000 as remuneration had the contract been executed until its expiry date. Consequently, the Chamber concluded that the amount of EUR 400,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

40. In continuation, the Chamber verified as to whether the player had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income, and noted that the player remained unemployed for the relevant period.

41. Accordingly, the Chamber concluded that the compensation due to the player, comprehending both the residual value of the contract amounts to EUR 400,000.

42. In addition, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of compensation as of 2 April 2019 until the date of effective payment.

43. Finally, taking into account the consideration under number II./14. above, the Chamber referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

44. In this regard, the DRC pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

45. Therefore, bearing in mind the above, the DRC decided that, in the event that the club does not pay the amounts due to the player within 45 days as from the moment in which the player, following the notification of the present decision, communicates the relevant bank details to the club, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

46. The DRC recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

47. The DRC concluded its deliberations by rejecting any further claims filed by any of the parties.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Djordje Rakić, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Zhejiang Greentown FC, has to pay to the Claimant, within 45 days as from the date of notification of this decision, the amount of EUR 5,400 plus interest as follows:

a. 5% interest p.a. as from 6 July 2018 until the date of effective payment on the amount of EUR 4,596; and

b. 5% interest p.a. as from 10 August 2018 until the date of effective payment on the amount of EUR 804.

4. The Respondent has to pay to the Claimant, within 45 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 400,000 plus 5% interest as from 2 April 2019 until the date of effective payment.

5. Any further claim lodged by the Claimant is rejected.

6. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the email address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts mentioned under points III./3. and III./4. above.

7. The Respondent shall provide evidence of payment of the due amounts in accordance with points III./3. and III./4. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated into one of the official FIFA languages (English, French, German, Spanish).

8. In the event that the amount in accordance with points III./3. and III./4. above are not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

9. The ban mentioned in point III./8. above will be lifted immediately and prior to its complete serving, once the due amount is paid.

10. In the event that the amounts due in accordance with points III./3. and III./4. above are still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the DRC. Where such decisions contain confidential information, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS.

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport (CAS)

Avenue de Beaumont 2, CH-1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer